Tuesday, 4 April 2023

Show Trial Time! Something’s Wrong.

Baltic Dry Index. 1412  +23          Brent Crude 85.29

Spot Gold 1952                US 2 Year Yield 3.97 -0.09

Coronavirus Cases 01/04/20 World 1,000,000

Deaths 53,103

Coronavirus Cases 04/04/23 World 684,140,494

Deaths 6,832,670

I knew something was wrong somewhere, but I couldn’t spot it exactly. But if something was coming and I didn’t know where from, I couldn’t be on my guard against it. That being the case I’d better be out of the market.

Jesse Livermore.

The big media news today will be the Anti-Trump show trial getting underway in New York City. Well over covered in mainstream media, we will instead cover today’s other news trivia.

From where I watch global commodity and stock markets from EUSSR free, inflation and interest rate rising UK, the picture to me is of stagflation arriving. Very few make money during stagflation. It’s a good time for most to be out of most markets awaiting further developments.

Though it’s far to early to start guessing the outcome of the northern hemisphere crops, the Kansas winter wheat crop is off to a worrying start due to lack of rains. Spain is in a second year of record drought. France, a large part of Germany and all of northern Italy are in drought.

Due to sky high prices, fertiliser use is being reduced where it’s available at all. It’s anyone’s guess how much grain and oilseed production will come out of Ukraine this summer.

Though there is still time for the northern hemisphere crops picture to improve, to this old dinosaur commodities follower it seems unlikely that food price inflation will end this year.

By accident yesterday I was in my local Morrison’s supermarket as the butchers section began dumping masses of pork ribs and filet steak marked down by 60 percent. Enquiring why, I was told the cost of living crisis has priced it out of the reach of most in this supermarket’s area. He said that even with this mark down most of it wouldn’t sell and just be scrapped at the end of the day.

To help out, I picked up some fillet steak marked down from £10 to £4.

Worrying times.

 

Asia markets mixed as Australia’s central bank holds rates steady, Aussie falls

UPDATED TUE, APR 4 2023 12:42 AM EDT

Asia-Pacific markets were mixed rose on Tuesday after the Reserve Bank of Australia held its cash rate target steady at 3.60% with the Australian dollar weakening against the U.S. dollar following the move.

The Australian S&P/ASX 200 erased earlier gains and last inched up 0.16%.

In Japan, the Nikkei 225 also rose 0.26%, and the Topix climbed 0.15%. South Korea’s Kospi was 0.46% up, while the Kosdaq index was higher by nearly 0.5%.

In Hong Kong, the Hang Seng index was 0.8% lower, while the Hang Seng Tech index saw a larger loss at 2%. In mainland China, the Shenzhen Component lost 0.4%, while the Shanghai Composite rose 0.16%.

In Japan, the Nikkei 225 also rose 0.26%, and the Topix climbed 0.15%. South Korea’s Kospi was 0.46% up, while the Kosdaq index was higher by nearly 0.5%.

In Hong Kong, the Hang Seng index was 0.8% lower, while the Hang Seng Tech index saw a larger loss at 2%. In mainland China, the Shenzhen Component lost 0.4%, while the Shanghai Composite rose 0.16%.

Australia’s central bank keeps rates unchanged at 3.6%

The Reserve Bank of Australia has held its its benchmark interest rate at 3.6%.

“The decision to hold interest rates steady this month provides the Board with more time to assess the state of the economy and the outlook, in an environment of considerable uncertainty,” the central bank said in its statement.

This marks the first halt in the RBA’s hiking cycle since it started raising rates in April 2022.

The Australian dollar weakened following the move to 0.6782 against the U.S. dollar.

Asia markets mixed as Australia's central bank holds rates steady, Aussie falls (cnbc.com)

Oil prices rise as investors move focus from OPEC+ cuts to demand outlook

BEIJING, April 4 (Reuters) - Oil prices posted gains in Asian trade on Tuesday after OPEC+ plans to cut more production jolted markets the previous day, with investors' attention shifting to demand trends and the impact of higher prices on the global economy.

Brent crude futures were up 41 cents, or 0.5%, to $85.34 a barrel by 0400 GMT. U.S. West Texas Intermediate (WTI) crude futures were trading at $80.83 a barrel, up 41 cents, or 0.5%.

Both benchmarks jumped more than 6% on Monday after the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, collectively known as OPEC+, rocked markets with Sunday's announcement of plans to lower output targets by a further 1.16 million barrels per day (bpd).

The latest pledges bring the total volume of cuts by OPEC+ to 3.66 million bpd including a 2 million barrel cut last October, according to Reuters calculations - equal to about 3.7% of global demand.

"The buying spree from the OPEC+ output cut has calmed down and market attention has shifted to the future demand outlook," said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.

"In the short term, demand is expected to rise for the summer driving season, but higher oil prices may intensify inflationary pressures and prolong interest rate hikes in many countries, which could dampen demand," he said. Kikukawa noted the impact could also reignite concerns about the global financial industry.

The OPEC+ production curbs led most analysts to raise their Brent oil price forecasts to around $100 per barrel by year-end. Goldman Sachs lifted its forecast for Brent to $95 a barrel by the end of this year, and to $100 for 2024.

The news, however, added to investor worries about higher costs for businesses and consumers, raising fears that an inflationary jolt to the world economy from rising oil prices will result in more rate hikes.

More

Oil prices rise as investors move focus from OPEC+ cuts to demand outlook | Reuters

Finally, is the UK commercial real estate boom turning to bust? Or is it just a normal real estate correction to higher interest rates reducing demand?

Is the US real estate bubble over?

 

Over £200bn wiped off real estate value in largest-ever property write-down in the UK

April 3, 2023

A total of £210billion has been wiped off the value of Britain's commercial real estate in the past nine months, according to a report. The UK's non-residential building stock (excluding land value) was worth £899billion at the end of 2020, according to the Office for National Statistics (ONS).

 

By the middle of last year, the value of these buildings had probably risen to about £1trillion, according to the Centre for Economics and Business Research (Cebr) analysis released today (April 3).

Since mid-2022, the market has collapsed with Schroders Research estimating the value to now be down a fifth, or £210billion, from June's peak.

This would be the largest ever property write-down in the UK and three times the £71billion fall between the end of 2008 and the end of 2010, Cebr says.

Cebr says the consensus amongst property analysts is the market is likely to stabilise somewhere near its current level, provided there are relatively limited forced sales. The centre's own forecasts are similar.

Cebr Benjamin Trevis told Express.co.uk: "Estimates show the commercial property market has fallen by three times the value of the write-down seen after the financial crash in 2008.

"This result demonstrates the negative consequences of tighter monetary policy and is troubling for an already-stagnating UK economy.

"Due to differing underlying issues presented to the sector, we expect lower future investment to prove the main negative outcome, rather than a repeat of the crisis 15 years ago.

"Additionally, although lowering interest rates could potentially address the decline, this prospect looks unlikely until at least the end of this year due to stubbornly high consumer inflation."

More

Over £200bn wiped off real estate value in largest-ever property write-down in the UK (msn.com)

Manhattan real estate sales plunge 38%, but cash deals hit all-time record

Manhattan real estate sales fell 38% in the first quarter, as buyers and sellers battled over prices and mortgage rates remained volatile, according to new reports.

Total sales volume fell to $4.4 billion in the quarter, with 2,242 apartments and townhouses sold, compared to 2,546 sales in the first quarter of 2022, according to a report from Douglas Elliman and Miller Samuel. The average sales price fell 5% to $1.95 million and the median sales price fell 10% to $1.075 million, according to the report.

The drop in sales and prices follows a 29% decline in the fourth quarter, and suggests that the nation’s largest real estate market is correcting after a post-pandemic boom in prices and demand. The big question for brokers, buyers and sellers is where the new “bottom” will be in Manhattan.

“I think we’ll see a seasonal uptick in the spring,” said Jonathan Miller, CEO of Miller Samuel, the appraisal and research firm. “But some of it depends on whether the [Federal Reserve] holds rates where they are.”

Brokers say the biggest challenge for deals is the wide gap between buyer and seller price expectations. Relatively low levels of inventory, or unsold listings, means that buyers still don’t have much choice in Manhattan. There were 6,996 homes on the market in the first quarter, slightly lower than the five-year average of around 7,200, according to Miller Samuel.

“There still is a disconnect between buyers and sellers,” said Jason Haber at Compass. “Sellers are not slashing prices left and right to get deals done. They have confidence. They feel like ‘if I lose a buyer there’s another one down the road waiting.’ There is a no panic selling, or thinking they have to get out now.”

Sellers have trimmed prices, but not enough for today’s bargain-hunting buyers. 

More

Manhattan real estate sales plunge 38%, but cash deals hit record (cnbc.com)

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

UK economy on tightrope between recession and growth as exports slip but inflationary pressure eases in March

3 April 2023


Manufacturing fell in March, although fears the UK economy is entering a recession may be premature as inflation eased and average supplier lead times improved.

The seasonally adjusted S&P Global /CIPS UK Manufacturing Purchasing Managers’ Index fell to 47.9 in March, down from February’s seven-month high of 49.3 and an earlier flash estimate of 48.0.

The PMI has stayed below the neutral 50.0 mark for eight successive months.

Analyst said although the data allowed room for optimism the manufacturing sector was “not out of the woods just yet” although, March’s PMI suggests that the downturn now is bottoming out.

Gabriella Dickens, senior UK economist at Pantheon said: ” While the headline index remained below the 50.0 mark for the eighth month in a row, driven by a renewed decline in the output index to 49.0, from 50.9, the new orders index rose back above 50.0 for the first time since May 2022, reflecting a slight improvement in domestic demand. Manufacturers also were the most upbeat about the 12-month outlook since February 2022. “

“Note, though, that manufacturing output still was boosted in March by the firms working through order backlogs; this support won’t last much longer.”

“Looking ahead, the near-term outlook for consumer demand has improved, following the government’s decisions to maintain both the Energy Price Guarantee and fuel duty at its current level in the Spring Budget, thereby averting a 1 per cent hit to real incomes.

“But business investment likely will remain weak this year, due to higher interest rates and the fact that the government’s announcement of full capital expensing in the next three years came too late to prevent investment from falling sharply at the end of the super-deduction policy.

“Accordingly, we think that manufacturing output will flatline over the coming months.  and finished products were both depleted during the latest month.”

Rob Dobson, director at S&P Global Market Intelligence, said: “UK manufacturing production fell back into contraction at the end of the opening quarter, as companies scaled back production in response to subdued market conditions. Although total new orders saw a fractional increase, this followed on from a nine-month sequence of contraction and suggests that order book levels remain low overall.”

“Declining new export order intakes remain a significant drain on demand, offsetting signs of a modest revival in the domestic market.

More

UK economy on tightrope between recession and growth as exports slip but inflationary pressure eases in March (msn.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

Analysis: COVID Vaccines Caused 300,000 Excess Deaths in 2022 Alone

John Leake Dr. Peter A. McCullough, MD

Apr 1 2023

Every day Dr. McCullough and I speak to people who have been injured—or have a family member who has been killed—by one of the COVID-19 vaccines. Almost every day, McCullough examines one or more patients with vaccine injuries in his clinical practice. Because he has become a “go-to” doctor for people who are suffering from these syndromes, his view of the problem is not statistical, but at the individual human level.

The United States has a census-counted population of 332 million [estimate by U.S. Census Bureau, July 1, 2021]. Thus, if even a small percentage of these people are injured or killed by COVID-19 vaccines, it’s still a frightful number.

Consider that 58,220 men were killed in ten years of fighting in Vietnam. This was just a tiny percentage of the 100 million American men counted in the 1968 census, but it was still a huge number of men to die in their early twenties.

Yesterday, former BlackRock portfolio manager Ed Dowd and his analysts at the research firm, Phinance Technologies, published a report on the cost of the COVID-19 vaccine program in the United States for the year 2022.

I know from multiple, probing conversations with Dowd that he is a conservative analyst. A serious and sober-minded man, he is ruthless in eliminating biases and wild assumptions. He and his team have focused their research on the 148 million Americans (between the ages of 18–64) who are employed. The Bureau of Labor Statistics compiles much data on this cohort, as does the life insurance industry because many employed people receive policies as part of their compensation packages.

Dowd’s report is grim. As he encapsulated the results in a tweet:

---- As a true crime author, I always focus on the human cost. I know that the death of a single young person can devastate a family and even an entire community. “26.6 million injuries; 1.36 million disabilities; 300,000 excess deaths.” Note that this death count in one year is 5.2 times the number of men killed in ten years of combat in Vietnam.

 

Perhaps the most extraordinary thing about this state of affairs is that most Americans don’t know it’s happening. Every day, young people are dying from heart attacks, strokes, and seizures caused by COVID-19 vaccines. Most of their families and friends are led to believe that they just died—suddenly and unexpectedly—of acute conditions that were extremely rare in young people prior to 2021.

 

Read the full Phinance Technologies Report.

Analysis: COVID Vaccines Caused 300,000 Excess Deaths in 2022 Alone (theepochtimes.com)

Some other useful Covid links.

Johns Hopkins Coronavirus resource centre

https://coronavirus.jhu.edu/map.html

Centers for Disease Control Coronavirus

https://www.cdc.gov/coronavirus/2019-ncov/index.html

The Spectator Covid-19 data tracker (UK)

https://data.spectator.co.uk/city/national

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

Spain reports soaring number of hybrid wind-solar projects now under review

Spain’s Ministry for the Ecological Transition says it is now reviewing a significant amount of hybrid wind-solar power projects. The developers include Iberdrola, Acciona, Forestalia, Ignis, and Enel Green Power.

APRIL 3, 2023

Spain's Ministry for the Ecological Transition has recently started to review approvals for numerous projects that combine PV with wind power. The developers include Spanish energy giant Iberdrola, renewables producer Acciona, project developer Forestalia, energy company Ignis , and Enel Green Power, the renewable energy unit of Italian utility Enel.

Iberdrola is the developer with the largest share, split into 11 proposals, including some initiatives to hybridize existing plants and some to develop new hybrid schemes. The Spanish utility wants to build a series of solar plants to be connected to existing wind facilities in Spain.

Acciona, meanwhile, has submitted a proposal to hybridize a wind power facility with a 31.4 MW solar plant in Albacete, and another proposal to connect a wind plant with a 26.5 MW PV array in Jerez de la Frontera. It says it plans to hybridize two wind facilities in Palencia with a 31 MW solar facility and a wind power plant in Albacete with a 52 MW solar farm.

Ignis has submitted a proposal to build a 282.2 MW hybrid plant in Zaragoza, while Enerpal has revealed plans to build a 30 MW solar installation close to a wind plant in Palencia.

Madrid-based Grupo Arrate says it wants to build a 107.8 MW hybrid park in Albacete and a 171.2 MW installation in Olmedilla. Enel Green Power, meanwhile, says it plans to deploy a 259.2 MW plant in Teruel. In addition, Forestalia says it wants to couple a 42.5 MW solar plant with two existing wind facilities in Zaragoza, totaling 126 MW of capacity.

Spain currently hosts one of the world's first hybrid wind-solar projects – a 3.3 MW demonstration project built in 2018 by Portuguese utility EDP and Danish wind specialist Vestas near Cadiz, Andalucía, in southern Spain.

Spain reports soaring number of hybrid wind-solar projects now under review – pv magazine International (pv-magazine.com)


I learned early that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that.

Jesse Livermore.


 

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